Tech-savvy guests spend more

By Glenn Withiam, Director of Publications, Cornell Center for Hospitality Research
| October 09, 2008

Although technology applications can greatly improve hotel operations and benefit guests, the fact is that not all guests appreciate changes in a hotel's technology. Some guests readily embrace your hotel's technology upgrades, in part because they are interested in taking advantage of the benefits of improved efficiency. However, some guests want no part of technology and are not willing to pay for technological innovations.

I think it's fair to say that most hotels are not going to stand still on technological innovation, especially given the industry's competitive climate. The good news is there's no need to stand still. A study from the Cornell University Center for Hospitality Research has found that those guests who are most appreciative of hotel technology tend to be the most frequent travelers and are inclined to patronize upscale hotels.

A research team led by Rohit Verma, an associate professor at the Cornell School of Hotel Administration, used a web-based survey tool called the Technology Readiness Index (TRI) to determine the technology inclinations of 865 travelers. What the researchers found is a normal, bell-curve distribution of travelers' attitudes toward hotel technology, based on the TRI. More interesting, though, is that they found a distinct difference in the travel and spending habits of hotel guests who appreciate technology as compared to those who shun it.

Survey says...
The demographics of the respondents in this study who scored high on the TRI, or those who favor technology, are relatively younger, more highly educated, and more affluent. The percentage of male guests in the high-TRI group is greater than it is in the low-TRI group. Additionally, the technology-adept guests are more likely to frequent upscale hotels than are the other members of the sample.

Professor Verma and his coauthors went further with this data by determining whether the TRI score would in fact differentiate guest characteristics. Looking at the sample for this study, Verma's group found that the travelers who scored highest on the TRI were also more inclined to be frequent travelers who are willing to pay a relatively high room rate, as compared with those who are not keen on technology. The travelers with the highest technology score in this particular sample were also more likely to have stayed in an upscale hotel on their most recent trip.

Weigh your options
There are certain technological elements that are intertwined in hotel operations and will likely be present regardless of a property's propensity to be on the cutting-edge of IT adoption, such as online hotel booking, self check-out, in-room Internet access and business centers. While many hotel guests might desire additional technological innovations, managers must still consider whether their hotel appeals to guests who have less interest in technology.

One implication of this report is that it seems likely that by implementing new technology, hotels are probably discouraging certain groups of travelers from staying at your property. Whether that's a negative outcome is up to you, but it's certainly worth taking into account as you consider technology upgrades. If you determine that your hotel appeals to guests who do not have an affinity for technological change, carefully consider the benefits and costs of new installations. Again, since it's virtually impossible to stand still, you might examine ways to buffer the effects of new technologies. Verma and his coauthors suggest, for instance, maintaining human interaction for those who are unsure of technological changes.

In any event, by surveying your guests you can ascertain their general view of technology. At the same time, it appears that technological innovation differentiates guests according to their travel habits. Certainly a tool like the TRI is another way of learning more about your guests, and particularly a way of understanding how to use technology to serve them more effectively.

The study, Segmenting Hotel Customers Based on the Technology Readiness Index, is available for download at no charge at The Center for Hospitality Research, found online at www.hotelschool.cornell.edu.